Comments on: What You Should Know About The Stock Market

by: Kalid

Mon, 21 Jul 2008 07:23:13 +0000

Hi Rodrigo, great question. As far as I know, all stock motion is the result of changes in bids and asks, just like changes in price on eBay is the result of incoming bids.

*However*, there can certainly be (and most certainly are) automatic triggers that people set up — many firms let you do this. For example, if you own stock, you can set a trigger (limit order) to sell the stock when it reaches a certain price, such as $45. So, the impact of many limit orders may make the motion of stock look “automatic”, sort of like people automating auctions on eBay. But at the end of the day, it’s all bids and asks.

-Kalid

by: Rodrigo

Sun, 20 Jul 2008 18:40:53 +0000

Hi,
great article. I was looking for this explanation for a long time. The question I was looking for was why stock prices rise and fall - the mechanics(who puts up/down the price) and not the reasons(micro and macro economics).

To go one further - the market is very dynamic - are there automatic “rules” that make the prices go up and down on stocks as well? Or is it purely individual buyers setting limits manually, stock by stock?

For example - a stock is sold at $40, buyers start buying it, if the seller is smart, he would try and sell it for more - is this action automatic or manual?

Thanks!

by: 籬

Sat, 14 Jun 2008 02:45:20 +0000

Thanks Raph, glad you found it useful!